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Someone Actually Made a Horror Movie About Student Debt

America's growing student debt burden is a legitimate problem that, like many of the challenges facing educated twenty-somethings in our tepid economy, has been blown grossly out of proportion. For that, we can thank a media all too willing to focus on scare stories about liberal arts grads trying to bartend their way past $100,000 in loans. However, it's taken until this week for me to find an actual horror movie about the psychological trauma of owing monthly Stafford payments.

This seven-minute, Shyamalan-esque gem, titled "The Red," comes courtesy of American Student Assistance, a nonprofit that apparently helps families figure out how to handle higher-ed debt. They seem to have pretty good intentions; the press release says the group wants "students and recent graduates to stop avoiding their student loans and feel the relief that comes with taking control of them," and I'm not going to argue with promoting financial literacy. But metaphorically depicting debt as a snarling red smoke monster ready to choke the life out of a 23-year-old unless they visit your website seems to obscure more than it illuminates, no?

So let's do a little clarifying. The hapless young woman in this video frets that she's carrying "tens-of-thousands" of dollars worth of debt. How representative is she of your ordinary post-collegiate young professional?

Not very. At some point, you've probably heard that the average student borrower carries around $27,000 in loans by the time they finish their bachelor's. It's a big, easy to remember, and I guess vaguely smoke-monsterish number. But most graduates don't actually owe anywhere near that much come commencement. Roughly 70 percent of borrowers take out less, while 36 percent of grads take out no loans at all.

At least, that's what the data we have indicate. As Libby Nelson at Inside Higher Ed has explained, our information on student debt comes from a patchwork mess of surveys that are "rife with possible inaccuracies," and are usually a few years behind the times. But one of the more useful sources comes from the Department of Education's Beginning Postsecondary Students Longitudinal Study, which in its most recent iteration began tracking a group of several thousand students as they started their college careers in the 2003-2004 school year. The graph below, created by the College Board, breaks down how much debt the students who eventually graduated from four-year schools carried as of 2009.

Let's start with the big picture, captured at the very bottom row of the graph. Again, among all four-year institutions -- public, private, for-profit, and non-profit -- 36 percent of those who graduated took out nothing. Zero. No loans. Yes, these people exist. Some are dependents (meaning they have help from family), and some are independent (meaning they're self-financing). Meanwhile, 11 percent took out less than $9,822; another 15 percent took out between $9,883 and $17,288. Only 19 percent took out more than $27,978.*

But not all schools are created equal. Note that at state colleges, which educate the vast majority of students, 40 percent of dependent graduates took out nothing, and only 14 percent borrowed more than $27,978 in loans. At for-profit schools, just 16 percent of graduates made it through without debt, and 65 percent borrowed beyond the $27,978 mark.

Which brings us to the thing that often gets lost in this conversation. Yes, student debt has grown like poison ivy across most of higher ed. But the young people truly feeling its worst effects are those who attend the for-profits. These schools educate about 10 to 13 percent of all undergrads, yet their students receive about a quarter of all federal financial aid and make up 47 percent of all defaults on federal student loans. They're a disproportionate part of the problem, and talking about borrowing as if it's having an equally deleterious effect for all students takes the focus off the specific problems that this one, very poorly regulated industry has helped create. In the process, we're probably scaring off the many, many, low-income but high-achieving students who never bother to apply to selective colleges with more generous financial aid and lower default rates, in part possibly because of the constant drumbeat about how expensive a degree is.

I'm not saying we shouldn't discuss the debt issues facing students at State U. Of course we should. But treating the entire problem as a horror film isn't doing anybody any favors.

*This graph is a tiny bit confusing because the "quartiles" up top correspond to debt among all borrowers, including dropouts who aren't included in the other numbers on this chart. Also, in case you were wondering, the figure next to each type of institution shows the tally of students in the study who graduated from that type of school.